Gavin Newsom is in the twilight of his governorship. He’s termed out in 2026. He’s desperate to present himself as the leading Democratic presidential candidate. He’s attempted to cast California as the example for the rest of the country via his mockery of other states on X and via his podcast, but California is a fiscal mess under his leadership.
Debts such as the government employees' pension fund, known as CalPERS, are bad enough. In 2022, that pension fund was only 72 percent funded and had a debt load of 611 billion dollars. But the state has other debt problems that Newsom almost certainly won’t boast about or discuss on his podcast.
READ MORE Reality Bites: From the Poopy Streets of San Francisco to Gavin Newsom's BS, California Stinks
California’s Fiscal House is in freefall.
California, like every other state in the union, relies on taxes to pay for public services and public works. Income taxes are one revenue source, but taxing employers is another. If major corporations move out of the state, the state will lose those tax dollars. Just the interest on the debt is crushing.
Thanks to Gavin Newsom's mismanagement, California is in trouble, big trouble.
Since California Gov. Gavin Newsom took office in 2019, state debt payments on unemployment benefits have gone from zero to nearly $600 million this year, and could soon result in annual payroll tax increases of nearly $500 per employee
These payments to the federal government will soon reach $1 billion per year to pay back $20 billion California borrowed to help cover what the state says was $55 billion in "ineligible" or fraudulent COVID-era unemployment insurance benefits claims, state records show.
Most recently, only two states had not paid back their massive COVID-related loans. Those states were New York and California. With New York agreeing to pay its debt, that leaves Newsom’s California.
DIVE DEEPER How Many Recall Elections Can You Fund With $32 Billion? Asking for Gavin Newsom.
Employers who decide to stay in the state will be disincentivized to hire anyone, particularly for entry-level positions. It’s a calculation for employers, and for the most part, employers would make that calculation to not hire new employees. Or, employers would turn full-time employees into part-time employees to avoid the cost of penalties for not providing health care under the Affordable Care Act. And there is more to worry about. According to Tim Taylor, the policy Director with the National Federation of Independent Businesses, the cost will soon be passed on to California's employers.
“We still haven't seen any real accountability with respect to the fraudulent claims paid out by the [California Employment Development Department] and yet the state's UI debt surges while struggling small businesses are forced to make the minimum payment on the state's maxed-out credit card,” Tim Taylor, California policy director for the National Federation of Independent Business, told The Center Square. “Households can't survive that way and neither can states.”
Or specifically, Governor Newsom’s state.
"Numbers" are something that Gavin Newsom has attempted to use as a foundation for his almost certain run for president, such as murder rates in California, but what he doesn’t talk about are numbers that show a fiscal house in collapse. Newsom has often claimed that California should be the nation's benchmark. I hope not.
The state has continued to bleed jobs, although Newsom likes to pretend that there is a net gain. Yes, beginning January 2023, the state gained 181,000 government jobs. But it lost 173,000 private sector jobs - the employers who keep the lights on. Democrats massage those stats with nonsense. For instance:
Thirty-eight percent of these new government and government-supported jobs are from elderly or disabled individuals using state funds to pay household members and others minimum wage for part-time care and assistance.
And most of the government jobs are exempt from paying the UI federal tax. Thus, the burden would fall on the private sector. Employers will be saddled with paying for the state's fiscal irresponsibility. But Gavin Newsom is a master and deflection.
If you recall, Newsom was proud to sign the law that increased the minimum wage for fast-food workers to $20 an hour. For those who kept their jobs, that might have been a good thing. Not so much for the 18,000 who lost their jobs in the fast food industry. In short, signing that law was a net loss for everyone, save for the few people who are still frying fries.
And one should not forget the Fire Aid debacle. 100 million dollars seemed to “disappear” into the "NGO looking glass."
California's fiscal house is falling apart, and its citizens (the ones who are not leaving the state) will pay the costly price of Gavin Newsom's poor management.
Editor’s Note: Help us continue to report the truth about corrupt politicians like Gavin Newsom.
Join RedState VIP and use promo code FIGHT to get 60% off your membership.